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With China’s Alibaba Group set for a stock market listing in the United States, e-commerce giants Amazon and eBay need to get ready for a new kid on the block.

“I think the likelihood that you and I and our friends and family will be using Alibaba in some way is very high,” said Will Mitchell, a professor of strategic management at the Rotman School of Management.

It’s going to be a blockbuster initial public offering, possibly shattering the $16 billion (U.S.) mark set by Facebook in 2012 and the nearly $20 billion raised by credit card giant Visa in 2008.

The e-commerce giant’s market value is estimated at $168 billion, making it bigger than 95 per cent of the Standard & Poor’s 500 index, and is the most valuable Internet company, after Google, according to calculations done by Bloomberg.

Alibaba’s operations are concentrated in China, so it is not well known in North America. But it handled more than $248 billion in transactions last year, more than Amazon and eBay put together. It is clearly setting the stage for growth elsewhere in the world with its initial public offering, choosing to list in New York over Hong Kong or Shanghai.

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“That’s both a sign of confidence in itself, and putting down a stake that it can grow beyond China,” Mitchell said.

It also signals that Alibaba wants to boost its credibility by proving it can stand up to the scrutiny of U.S. regulators. The company filed a prospectus Tuesday with the U.S. Securities and Exchange Commission for an IPO expected several months down the road.

Alibaba did not specify the number or price of shares it will offer or the valuation it will seek, or whether it would list on the New York stock exchange or the NASDAQ.

“It’s a lot of money—$16 billion, $20 billion, $15 billion — who knows how many billions?” said Mitchell.

But beyond the numbers, it also illustrates the importance of China and its influence in North America, whether it is Lenovo’s laptops or Haier’s appliances or CNOOC’s acquisition of Nexen, with its Canadian oilsands assets.

“Alibaba still has amazing growth opportunities within China,” Mitchell said. “But it is clearly looking beyond China for future growth.”

The group of companies under the Alibaba umbrella includes the Taobao marketplace, which lets individuals and small businesses sell their wares, along with Tmall.com, which operates as a virtual shopping mall. Juhuasuan is a flash-sale model, and eTao is a shopping search engine.

It also has stakes in travel booking and real estate listing companies as well as the popular Weibo microblogging site, China’s version of Twitter. It also has its own online payment system, Alipay, though its efforts to introduce virtual credit cards have been thwarted by the Chinese government.

According to the SEC filing, Alibaba investor Yahoo will sell part of its 22.6 per cent stake, as will Japan’s SoftBank Corp., though it will continue to own more than 30 per cent after the offering.

The IPO is expected to make billionaire Jack Ma, a former English teacher who founded Alibaba in his Hangzhou apartment in 1999 with 17 friends and $60,000 they had raised, even richer.

The name Alibaba was chosen because it’s easy to say in many languages, and according to the company’s website, it brings to mind “open sesame,” representing that its platforms open a doorway to fortune for small businesses.

Ma, who stepped down as CEO last year but remains chairman, is seen by some as China’s version of Jeff Bezos or Bill Gates. He owns 8.9 per cent of the company, and, according to Forbes, he is already worth $8.4 billion and is China’s fifth richest person.

Joseph Tsai, who was born in Taiwan and educated at Yale University, where he received his law degree, serves as executive vice-chairman. He has Canadian citizenship, according to the SEC documents, but a spokeswoman for Alibaba refused to say where and when Tsai lived in Canada.

Tsai has a 3.6 per cent stake in Alibaba and is considered the one who pushed for a New York listing, because Hong Kong exchange officials balked at the idea that Alibaba’s 16-member partnership committee be allowed to nominate a majority of board members.

Unlike Amazon, Alibaba doesn’t actually buy the products it sells or pay for warehouses where the goods are stored. It serves as an intermediary to connect buyers and sellers, a model considered a hybrid of eBay and Google. It then collects fees on some sales, as well as advertising payments from merchants that want to get featured.

According to the SEC filing, Alibaba’s revenues and buyers are both growing steadily. For the year ending March 31, 2013, Alibaba’s total revenues were $5.55 billion, with a net income of $1.39 billion.

For the nine months ended Dec. 31, 2013, revenues totaled more than $6.51 billion, generated a net profit of $2.85 billion. It had 231 million active buyers on its retail market at the end of 2013, up from 160 million buyers at the end of 2012.

By comparison, Amazon hasn’t had much in the way of net income during its 20-year history, with $274 million earned for all of 2013 on sales of $74.45 billion. Put another way, Amazon makes less than a penny for every dollar in revenue, while Alibaba makes about 43 cents.

Alibaba’s shares trading on a U.S. stock exchange would offer global investors an alternative to Amazon’s stock, said Edward Williams, an analyst at BMO Capital Markets.

The option to invest in either Amazon or Alibaba may sharpen as both companies increasingly push into each other’s home turfs, with Amazon working to increase sales in China and Alibaba stepping into the U.S., he said.

“As they begin to play in each other’s sandbox, it becomes more of a threat,” Williams said. “That’s where competition becomes more intense.”

Rotman’s Mitchell believes those who choose to invest in Alibaba see it an opportunity to invest in China, one of the world’s most dynamic markets.

“It’s a bet on getting in on the ground floor of a Chinese firm that has the potential to become another multinational,” he said, pointing to success Chinese stories like Huawei or Lenovo, though some investors will certainly be nervous about investing in China.

“This is one where the upside is very uncertain,” Mitchell said, noting he can imagine both a scenario where Alibaba does “spectacularly well” and a scenario where it “crashes and burns.”

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